Capital rationing is the process by which management allocates funds among competing capital investment proposals.

Question

Quizplus · Accepted Answer

Capital rationing is indeed the process by which management prioritizes and allocates funds among various investment proposals that compete against one another for limited capital resources. It involves comparing the potential benefits and costs of each investment opportunity and selecting the ones that provide the greatest return on investment given the available budget.

Capital Rationing Is the Process by Which Management Allocates Funds